Tag Archives: management

Understand how quant funds are changing how we see the future of investing and taking financial advise.

Here are some highlighted comments about this article from Financial Times:

They speak of how algos make the markets complex and fragile

More unsophisticated (dumb money or even retail money) flows into electric traded funds without understanding underlying investment nor know the high risk. These are put into mainstream ETF funds like Vanguard or Blackrock. Could this be the next 2008 waiting to blow up?

Examples of Two Sigma is used to show short time to get to 50 billion asset under management like Renaissance Technology or DE Shaw.

One French was quoted as doubling their staff within 5 years while other old investment banks are shedding traditional trading roles. Remember how Goldman Sachs is considered now a technology company vs an investment bank with 30+% of staff as software engineers.

Machine learning will transform investment management
According to this article, the role of a quant will radically change in coming years

Advances in machine learning will allow further automation of tasks, including feature discovery, algorithm selection and even the optimization of trading code that implements a signal. With these newer methods, humans can spend their time creating frameworks and obtaining new data sets. Automated methods also reduce the number of quants needed to run a firm, which, given the high cost of salaries, is increasingly important as well.

The tools that enable automated strategy discoveries will also enable customized solutions. This is because the criteria for a successful strategy can be specified upfront in the framework. For instance, one approach could search for a strategy with a specified maximum deviation from a classic index, such as U.S. small-cap value, with as much additional alpha as possible. This type of customization could lead to a new class of retail investment products.